Anyone else frustrated by poor choice of Lifetime ISAs?

greendoor665 · 12 January 2018 at 11:39AM

It's 9 months since it was launched and there are still only a small handful of options. 1 cash, and a few stocks and shares. For stocks and shares, if you discount ones with robo-advice only or high management fees, you're left with only 2: Hargreaves Lansdown and AJ Bell Youinvest.

I've had a H2B ISA for a while and I'm planning to transfer it across soon. The main reason being the maximum property value is 250k, which no longer buys you much at all in the south east, especially if I buy with a partner. Whereas the LISA is 450k across the whole UK, not just London. Also I missed the boat on the 4% deals which were initially available and am only earning 2% which doesn't even beat inflation.

I've been waiting for more providers to launch accounts but it seems nothing is happening, so I've now given up and applied to AJ Bell. To be fair, their platform fee at 0.25% is pretty competitive, but I was hoping to have a few more options to choose from by now.

Drp8713 · 12 January 2018 at 11:53AM

Im happy with HL and opened the LISA account and transferred the HTB straight away.

Ive invested quite defensively in the LISA in RIT Capital, Personal Assets, TR Property and a chunk in cash.

Even so, my gains are currently 5.6% so around £400, more than offsets the £30 fee.

I also need to think people need to quantify fees. HL is expensive, is it? I hold ITs, so when I get over £10k invested in April when the bonus arrives I will be capped at £45 a year. Which is 0.45%, but in a few years when I have £20K invested that same £45 will be 0.225%.

I spent £34 on a Papa Johns yesterday for a family of 3. So is £45 to look after my LISA alot?

greendoor665 · 12 January 2018 at 12:44PM

You make a good point about HL's capped charges. AJ Bell's charges are not capped on funds so indeed they could be more than HL after a couple of years contributions.

ColdIron · 12 January 2018 at 12:55PM

greendoor665 wrote: »

You make a good point about HL's capped charges. AJ Bell's charges are not capped on funds so indeed they could be more than HL after a couple of years contributions.

HL's charges are not capped on funds unless you count the tiered reduction at £250,000. They are competitive for ITs with a cap of £45

msallen · 12 January 2018 at 2:54PM

No. I'm frustrated by the fact that I'm not allowed to open one.

jamei305 · 12 January 2018 at 3:21PM

I haven't opened one for this reason. What if HL discontinue it in five years for example? There might only be one provider to choose from and they could whack up the fees.

I need to be confident there will be competition in the market until I'm 60.

CavendishWobble · 12 January 2018 at 3:31PM

Its a complicated & risky product, you can only withdraw if you want to buy a house around a specific value or for your pension in x years time.

Consider this with historic products such as PPI and more recently packaged bank accounts where billions have been paid to customers who were mis-sold, i cant say i blame financial services from being cautious or deciding not to get involved.

adonis10 · 12 January 2018 at 3:40PM

I currently have a S&S ISA with HL but presumably I can open a LISA alongside it, with the same provider? At what point does the Government's 25% bonus get added?

greendoor665 · 12 January 2018 at 4:07PM

For 17/18, the government bonus will be added for the entire year some time after 6th April 2018. After this the bonus will be added monthly on any new contributions for the month. When exactly you receive the cash is not quite clear though, I imagine there will be a lag of a few weeks at least.

kidmugsy · 12 January 2018 at 4:16PM

CavendishWobble wrote: »

Consider this with historic products such as PPI and more recently packaged bank accounts where billions have been paid to customers who were mis-sold, i cant say i blame financial services from being cautious or deciding not to get involved.

Indeed. Wallies and crooks extort money from the banks and then everyone wonders why the banks become ultra-cautious about new retail products, or why IFAs are reluctant to take on DB pension transfer business. It's almost as if incentives matter, isn't it?

AirlieBird · 12 January 2018 at 4:16PM

greendoor665 wrote: »

For 17/18, the government bonus will be added for the entire year some time after 6th April 2018. After this the bonus will be added monthly on any new contributions for the month. When exactly you receive the cash is not quite clear though, I imagine there will be a lag of a few weeks at least.

You receive the bonus within 28 days of the end of the reporting month (the reporting month being the 6th to the 5th of the following month.)

Anyone else frustrated by poor choice of Lifetime ISAs?

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